GAO

United States General Accounting Office

A

Testimony

Before the House Committee on Government Reform, 

House of Representatives

For Release on Delivery 

Expected at 10 a.m. EST

Wednesday, January 28, 2004

MILITARY PAY

Army National Guard 

Personnel Mobilized to 

Active Duty Experienced 

Significant Pay Problems 

Statement of

Gregory D. Kutz

Director, Financial Management and Assurance

Geoffrey B. Frank

Assistant Director, Financial Management and Assurance

John J. Ryan

Assistant Director, Office of Special Investigations

GAO-04-413T
The existing processes and controls used to provide pay and allowances to 

mobilized Army Guard personnel are so cumbersome and complex that 

neither DOD nor, more importantly, the mobilized Army Guard soldiers 

could be reasonably assured of timely and accurate payroll payments. 

Weaknesses in these processes and controls resulted in over- and 

underpayments and late active duty payments and, in some cases, large 

erroneously assessed debts, to mobilized Army Guard personnel. The end 

result of these weaknesses is to severely constrain DOD’s ability to provide 

active duty pay to these personnel, many of whom were risking their lives in 

combat in Iraq and Afghanistan. In addition, these pay problems have had a 

profound impact on individual soldiers and their families and may adversely 

impact on decisions to stay in the Army Guard. For example, many soldiers 

and their families were required to spend considerable time, sometimes 

while the soldiers were deployed in remote, hostile environments overseas, 

seeking corrections to active duty pays and allowances. 

Pay Problems at Six Case Study Locations 

Army Guard 

unit Soldiers with pay problems Comments 

Colorado 

Special Forces 62 of 62 34 soldiers were erroneously assessed debts averaging $48,000 each. 

Virginia Special 

Forces 

64 of 65 

Injured soldiers experienced problems 

receiving entitled active duty pay and 

related medical benefits. 

West Virginia 

Special Forces 

86 of 94 

Sergeant came under enemy fire during 

4-day trip to deliver pay records to 

correct errors. 

California 

Military Police 50 of 51 Majority of soldiers experienced delays 

in starting active duty pays. 

Maryland Military 

Police 

83 of 90 

Pays for 13 soldiers continued for 6 

weeks after early release from active 

duty. 

Mississippi 

Military Police 105 of 119 88 soldiers were mistakenly paid for 2 

types of hardship duty pay. 

Total 450 of 481 94 percent of soldiers had pay problems 

Source: GAO analysis. 

The pay process, involving potentially hundreds of DOD, Army, and Army 

Guard organizations and thousands of personnel, was not well understood or 

consistently applied with respect to determining (1) the actions required to 

make timely, accurate pays to mobilized soldiers, and (2) the organization 

responsible for taking the required actions. With respect to human capital, 

we found weaknesses including (1) insufficient resources allocated to pay 

processing, (2) inadequate training related to existing policies and 

procedures, and (3) poor customer service. Several systems issues were 

also significant factors impeding accurate and timely payroll payments to 

mobilized Army Guard soldiers, including (1) nonintegrated systems, 

(2) limitations in system processing capabilities, and (3) ineffective system 

edits. 

In light of the recent mobilizations 

associated with the war on 

terrorism, GAO was asked to 

determine if controls used to pay 

mobilized Army Guard personnel 

provided assurance that such pays 

were accurate and timely. This 

testimony focuses on the pay 

experiences of Army Guard 

soldiers at selected case study 

units and deficiencies with respect 

to controls over processes, human 

capital, and automated systems. 

GAO’s related report (GAO-04-89) 

made 24 recommendations to DOD 

including the following: 

♦ Establish a unified set of 

policies and procedures as well 

as performance measures in 

the pay area. 

♦ Evaluate staffing allocation, 

pay grades, and training at all 

54 Army Guard offices. 

♦ Identify options for improving 

customer service. 

♦ Review and resolve GAO 

identified pay issues at the six 

case study units. 

♦ Evaluate the feasibility of 

automating manual pays and 

redesigning the leave and 

earnings statements. 

♦ In developing the new pay 

system, consider a complete 

reengineering effort to include 

process and human capital. 

DOD concurred with GAO’s 

recommendations and described 

actions recently completed, 

underway, and planned to correct 

the noted deficiencies. 

www.gao.gov/cgi-bin/getrpt?GAO-04-413T.

To view the full product, click on the link 

above. For more information, contact 

Gregory D. Kutz at (202) 512-9095 or 

Kutzg@gao.gov. 

Highlights of GAO-04-413T, a testimony to 

the Chairman, House Committee on 

Government Reform 

January 2004

MILITARY PAY

Army National Guard Personnel Mobilized 

to Active Duty Experienced Significant 

Pay Problems 
Page 1 GAO-04-413T 

Mr. Chairman and Members of the Committee:

Thank you for the opportunity to discuss controls over payroll payments to 

mobilized Army National Guard (Army Guard) soldiers. Our related report1

issued in November 2003 details weaknesses in the processes, human 

capital, and automated systems that impaired prompt and accurate Army 

Guard payroll payments.

In response to the September 11 attacks, many Army Guard soldiers were 

activated to federal duty. A reported 93,000 Army Guard soldiers—

accounting for about a third of all mobilized reserve forces—were 

activated as of March 2003. These forces were deployed on various 

important missions across the United States and overseas in support of 

Operations Noble Eagle and Enduring Freedom, including search and 

destroy missions against the Taliban and al Qaeda; guarding al Qaeda 

prisoners held at Guantanamo Bay; providing security at the Pentagon and 

military bases; and carrying out military police functions in Iraq. 

Particularly given the critical and continuing roles Army Guard soldiers 

play in carrying out vital military and security missions, effective controls 

are needed to provide timely and accurate pays and allowances to these 

soldiers. Pay-related problems are not only costly and time-consuming to 

resolve, but result in financial hardship for soldiers and their families. In 

addition, there are indications that these pay problems are beginning to 

have an adverse effect on the Army’s ability to retain these valuable Army 

Guard personnel.

Because current DOD operations used to pay mobilized Army Guard 

soldiers relied extensively on error-prone, manual transactions entered into 

multiple, nonintegrated systems, we did not statistically test controls in this 

area. Instead, we audited six Army Guard units as case studies to provide a 

detailed perspective on the nature of payroll deficiencies with respect to 

Army Guard soldiers. As requested, we also conducted a limited review of 

one unit currently deployed in Iraq to identify any evidence of continuing 

pay problems. Further details on our scope and methodology and the 

results of the case studies can be found in our related report.2

1

 U.S. General Accounting Office, Military Pay: Army National Guard Personnel 

Mobilized to Active Duty Experienced Significant Pay Problems, GAO-04-89 (Washington, 

D.C.: Nov. 13, 2003).

2 GAO-04-89. See appendixes I-VII.
Page 2 GAO-04-413T 

Today, I will summarize the results of our work with respect to (1) the 

extent of pay problems we identified at our case study units, (2) 

deficiencies in the three key control areas of processes, people, and 

automated systems, and (3) recommended actions for addressing these 

issues.

Summary Internal control weaknesses in the processes, human capital, and 

automated systems resulted in significant pay problems at all six Army 

Guard units we audited. Overall, 450 of the 481 (94 percent) Army Guard 

soldiers from our six case study units had at least one pay problem 

associated with their mobilization. In addition, our limited review of the 

pay experiences of the soldiers in the Colorado Army Guard’s 220th Military 

Police Company, who are currently deployed to Iraq, indicated that some of 

the same types of pay problems that we found in our six case study units 

continued to occur.

Until DOD improves the cumbersome and complex processes used to pay 

mobilized Army Guard personnel, the Army, the Defense Finance and 

Accounting Service (DFAS), and, most importantly, the mobilized Army 

Guard soldiers, cannot be reasonably assured of timely and accurate 

payroll payments. These processes, involving potentially hundreds of 

Department of Defense (DOD), Army, and Army Guard organizations and 

thousands of personnel, were not well understood or consistently applied 

with respect to determining (1) the actions required to make timely, 

accurate pays to mobilized soldiers, and (2) the organization responsible 

for taking the required actions. In addition, we found several instances of 

outdated and conflicting DOD and Army regulations and guidance in the 

pay and allowance area.

With respect to human capital, we found weaknesses including

(1) insufficient resources allocated to pay processing, (2) inadequate 

training related to existing policies and procedures, and (3) poor customer 

service. The lack of sufficient numbers of well-trained, competent military 

pay professionals can undermine the effectiveness of even a world-class 

integrated pay and personnel system. A sufficient number of well-trained 

military pay staff is particularly crucial given the extensive, cumbersome, 

and labor-intensive process requirements that have evolved to support 

active duty pay to Army Guard soldiers. 

Automated systems issues—nonintegrated systems, limitations in system 

processing capabilities, and ineffective system edits—further constrained 
Page 3 GAO-04-413T 

DOD’s ability to provide a most basic service to these personnel, many of 

whom were risking their lives in combat. The Defense Joint Military Pay 

System- Reserve Component (DJMS-RC)—originally designed to process 

payroll payments to personnel on weekend drills, on short periods of less 

than 30 days of annual active duty, or for training—is now used to pay 

Army Guard soldiers for up to 2 years. Army officials told us that the 

system is now stretched to the limits of its functionality. DFAS has 

established “workarounds” intended to compensate for the DJMS-RC 

system constraints, which further compound the human capital issues. 

Overall, we found the current stove-piped, nonintegrated systems were 

labor-intensive and require extensive error-prone manual data entry and 

reentry. Despite DOD plans to implement system improvements in this 

area, the department will be required to operate within existing system 

constraints for at least several more years. 

The consequences of inaccurate, late, and, missing pays, and associated 

erroneous debts had a profound financial impact on individual soldiers and 

their families. One soldier’s spouse had to obtain a grant to pay bills while 

her husband was in Afghanistan. Soldiers and their families were required 

to spend considerable time, sometimes while the soldiers were deployed in 

remote, hostile environments overseas, continually addressing concerns 

over their pay and allowances. Further, pay-related problems can have an 

adverse effect on the Army’s ability to retain these valuable personnel. 

In our related report, we recommended a series of 24 actions to improve 

the accuracy and timeliness of payroll payments to mobilized Army Guard 

soldiers. In its response to our report, DOD concurred with our 

recommended actions and stated that it is already taking action to correct 

the noted deficiencies. 

Case Studies Illustrate 

Significant Pay 

Problems

We found significant pay problems at the six Army Guard units we audited 

related to processes, human capital, and systems. The six units we audited, 

including three special forces and three military police units, were:

• Colorado B Company, 5th Battalion, 19th Special Forces

• Virginia B Company, 3rd Battalion, 20th Special Forces

• West Virginia C Company, 2nd Battalion, 19th Special Forces

• Mississippi 114th Military Police Company
Page 4 GAO-04-413T 

• California 49th Military Police Headquarters and Headquarters 

Detachment

• Maryland 200th Military Police Company

These units were deployed to help perform a variety of critical domestic 

and overseas mission operations, including search and destroy missions in 

Afghanistan against Taliban and al Qaeda forces, guard duty for al Qaeda 

prisoners in Cuba, and providing security at the Pentagon shortly after the 

September 11, 2001, terrorist attacks.

For the six units we audited, we found significant pay problems involving 

over $1 million in errors. These problems consisted of underpayments, 

overpayments, and late payments that occurred during all three phases of 

Army Guard mobilization to active duty. For the 18-month period from 

October 1, 2001, through March 31, 2003, we identified overpayments, 

underpayments, and late payments at the six case study units estimated at 

$691,000, $67,000, and $245,000, respectively.3

 In addition, for one unit, 

these pay problems resulted in largely erroneous debts totaling $1.6 

million. Overall, we found that 450 of the 481 soldiers (94 percent) from our 

case study units had at least one pay problem associated with their 

mobilization to active duty. Table 1 shows the number of soldiers at our 

case study units with at least one pay problem during each of the three 

phases of active duty mobilization.

3

As a result of the lack of supporting documents, we likely did not identify all of the pay 

problems related to the active duty mobilizations of our case study units. However, for the 

pay problems we identified, we defined over- and underpayments as those pays or 

allowances for mobilized Army Guard soldiers during the period from October 1, 2001, 

through March 31, 2003, that were in excess (overpayment) or less than (underpayment) the 

entitled payment. We considered as late payments any active duty pays or allowances paid 

to the soldier over 30 days after the date on which the soldier was entitled to receive such 

pays or allowances. As such, these payments were those that, although late, addressed a 

previously unpaid entitlement. We did not include any erroneous debts associated with 

these payments as pay problems. In addition, we used available data to identify about 

$135,000 in collections against identified overpayments through March 31, 2003. We did not 

attempt to estimate payments received against identified underpayments. We have provided 

documentation for the pay problems we identified to cognizant DOD officials for further 

research to determine whether additional amounts are owed to the government or the 

soldier. 
Page 5 GAO-04-413T 

Table 1: Pay Problems at Six Case Study Units

Source: GAO analysis.

Some of the pay problems we identified included the following.

• DOD erroneously billed 34 soldiers in a Colorado National Guard 

Special Forces unit an average of $48,000 each in payroll-related debt—

most of which was erroneous. While we first notified DOD of these 

issues in April and sent a follow-up letter in June 2003, the largely 

erroneous total debt for these soldiers of about $1.6 million remained 

unresolved at the end of our audit in September 2003.

• As a result of confusion over responsibility for entering promotionrelated transactions associated with a Colorado soldier’s promotion, the 

soldier’s spouse had to obtain a grant from the Colorado National Guard 

to pay bills while her husband was in Afghanistan.

• Some soldiers did not receive payments for up to 6 months after 

mobilization and others still had not received some of their active duty 

pays by the conclusion of our audit.

• Ninety-one of 100 members of a Mississippi National Guard military 

police unit deployed to Guantanamo Bay, Cuba, did not receive the 

correct amount of Hardship Duty Pay.

• One soldier from the Mississippi unit was paid $9,400 in active duty pay 

during the 3 months following an early discharge for drug-related 

charges.

• Forty-eight of 51 soldiers in a California National Guard military police 

unit received late payments because the unit armory did not have a copy 

machine available to make copies of needed pay-related documents.

Army Guard unit

Soldiers with pay problems

Mobilization Deployment Demobilization

Colorado Special Forces 56 of 62 61 of 62 53 of 62

Virginia Special Forces 31 of 65 63 of 65 60 of 65

West Virginia Special Forces 36 of 94 84 of 94 66 of 94

California Military Police 48 of 51 41 of 51 0 of 51

Maryland Military Police 75 of 90 64 of 90 3 of 90

Mississippi Military Police 21 of 119 93 of 119 90 of 119
Page 6 GAO-04-413T 

• Four Virginia Special forces soldiers injured in Afghanistan, unable to 

resume their civilian jobs, experienced problems in receiving entitled 

active duty pays and related health care.

• Pays for 13 soldiers continued for 6 weeks after early release from 

active duty.

• 88 soldiers were mistakenly paid for 2 types of hardship duty pay. 

In some cases, the problems we identified may have distracted these 

professional soldiers from mission requirements, as they spent 

considerable time and effort while deployed attempting to address these 

issues. Further, these problems may adversely affect the Army’s ability to 

retain these valuable personnel. 

Pay Problems Continue with 

Unit Currently Deployed to 

Iraq

Our limited review of the pay experiences of the soldiers in the Colorado 

Army Guard’s 220th Military Police Company, which was mobilized to 

active duty in January 2003, sent to Kuwait in February 2003, and deployed 

to Iraq on military convoy security and highway patrol duties in April 2003, 

indicated that some of the same types of pay problems that we found in our 

six case study units continued to occur. Of the 152 soldiers mobilized in 

this unit, our review of available records identified 54 soldiers who were 

either overpaid, underpaid, or received entitled active duty pays and 

allowances over 30 days late, or for whom erroneous pay-related debts 

were created. We found that these pay problems could be attributed to 

control breakdowns similar to those we found at our case study units, 

including pay system input errors associated with amended orders, delays 

and errors in coding pay and allowance transactions, and slow customer 

service response. For example, available documentation and interviews 

indicate that while several soldiers submitted required supporting 

documentation to start certain pays and allowances at the time of their 

initial mobilization in January 2003, over 20 soldiers were still not receiving 

these pays in August 2003. This unit remained deployed in Iraq as of 

January 2004.
Page 7 GAO-04-413T 

Mobilized Army Guard 

Pay Process, Human 

Capital, and Systems 

Deficiencies 

Deficiencies in three key areas—process, human capital, and systems—

were at the heart of the pay problems we identified. Processes were not 

well understood or consistently applied and were outdated in several 

instances. Insufficient resources, inadequate training, and poor customer 

service impaired the human capital operations in this area. Further, the 

automated systems supporting pays to mobilized Army Guard soldiers 

were ineffective because they were (1) not integrated and (2) constrained 

by limited processing capabilities and ineffective system edits.

Process Deficiencies A substantial number of payment errors we found were caused, at least in 

part, by unclear procedural requirements for processing active duty pay 

and allowance entitlements to mobilized Army Guard soldiers. Complex, 

cumbersome processes, developed in piecemeal fashion over a number of 

years, provide numerous opportunities for control breakdowns. The DOD 

Financial Management Regulation guidance on pay and allowance 

entitlements alone covered 65 chapters. Procedural requirements, 

particularly in light of the numerous organizations issuing guidance 

applicable to this area, and potentially hundreds of organizations and 

thousands of personnel involved in implementing this guidance, were not 

well understood or consistently applied with respect to determining (1) the 

actions required to make timely, accurate active duty pays to mobilized 

Army Guard soldiers and (2) the component responsible, among Army 

Guard, active Army, and DFAS, for taking the required actions. For 

example, within the Army Guard, 54 state-level personnel and another 54 

state-level pay offices—United States Property and Fiscal Offices 

(USPFOs) are integrally involved in the process to pay mobilized Army 

Guard soldiers. Further, we found instances in which existing guidance was 

out of date—some of which still reflected practices in place in 1991 during 

Operation Desert Storm. 

Procedural Requirements Not 

Clear

Unclear procedural requirements for processing active duty pays 

contributed to erroneous and late pay and allowances to mobilized Army 

Guard soldiers. We found existing policies and procedural guidance were 

unclear with respect to amending active duty orders, stopping active duty 

pays for early returning soldiers, and extending active duty pays to injured 

soldiers.

At two of our case study locations, military pay technicians using vague 

guidance made errors in amending existing orders. One of these errors 
Page 8 GAO-04-413T 

resulted in 34 soldiers being billed a largely erroneous total debt of about 

$1.6 million. 

Procedural guidance was not clear regarding how to carry out assigned 

responsibilities for soldiers returning from active duty earlier than their 

unit. DFAS-IN guidance provides only that “the supporting USPFO will be 

responsible for validating the status of any soldier who does not return to a 

demobilized status with a unit.” The guidance did not state how the USPFO 

should be informed of soldiers not returning with their unit, or what means 

the USPFO should use to validate the status of any such soldiers. One 

USPFO informed us that they became aware that a soldier had returned 

early from a deployment when the soldier appeared at a weekend drill 

while his unit was still deployed. In four of six case study units, we found 

instances in which Army Guard soldiers’ active duty pays were not stopped 

at the end of their active duty tour when they were released from active 

duty earlier than their units. One Mississippi Army Guard soldier was paid 

$9,400 in active duty pay during the 3 months following an early discharge 

for drug-related offenses.

We also found a lack of specific procedures to ensure timely processing of 

active duty medical extensions for injured Army Guard soldiers. Even 

though Army regulations provide that Army Guard soldiers with active duty 

medical extension status are entitled to continue to receive active duty 

pays, allowances, and medical benefits, we found that four soldiers from 

the Virginia 20th Special Forces, B Company, 3rd Battalion in that status 

experienced significant pay problems and related problems in obtaining 

needed medical services to treat injuries or illnesses incurred while on 

active duty in part as a result of a lack of clearly defined implementing 

procedures in this area. 
Page 9 GAO-04-413T 

Organizational Responsibilities 

Not Clear

We also found that existing policies and procedures were vague with 

respect to organizational responsibilities. Confusion centered principally 

on the lack of clear guidance with respect to responsibility and 

accountability for Army Guard personnel as they move from state control 

to federal control and back again. To be effective, current processes rely 

on close coordination and communication between state (Army Guard unit 

and state-level command organizations) and federal (active Army finance 

locations at mobilization/demobilization stations and at area servicing 

finance offices) organizations. However, we found a significant number of 

instances in which critical coordination requirements were not clearly 

defined. For example, at one of our case study locations, we found that, in 

Individual Case Illustration: Unclear Regulations for Active Duty Medical 

Extension

Four soldiers who were injured while mobilized in Afghanistan for Operation Enduring 

Freedom told us that customer service was poor and no one was really looking after 

their interest or even cared about them. These problems resulted in numerous personal 

and financial difficulties for these soldiers. 

· “Not having this resolved means that my family has had to make greater sacrifices and 

it leaves them in an unstable environment. This has caused great stress on my family 

that may lead to divorce.”

· “My orders ran out while awaiting surgery and the care center tried to deny me care. 

My savings account was reduced to nearly 0 because I was also not getting paid while 

I waited. I called the Inspector General at Walter Reed and my congressman. My 

orders were finally cut. In the end, I was discharged 2 weeks before my care should 

have been completed because the second amendment to my orders never came and I 

couldn’t afford to wait for them before I went back to work. The whole mess was 

blamed on the ‘state’ and nothing was ever done to fix it.” 

· One sergeant was required to stay at Womack, the medical facility at Fort Bragg, 

North Carolina, while on medical extension. His home was in New Jersey. He had not 

been home for about 20 months, since his call to active duty. While he was recovering 

from his injuries, his wife was experiencing a high-risk pregnancy and depended upon 

her husband’s medical coverage, which was available while he remained in active duty 

status. Even though she lived in New Jersey, she scheduled her medical appointments 

near Fort Bragg to be with her husband. The sergeant submitted multiple requests to 

extend his active duty medical extension status because the paperwork kept getting 

lost. Lapses in obtaining approvals for continued active duty medical extension status 

caused the sergeant’s military medical benefits and his active duty pay to be stopped 

several times. He told us that because of gaps in his medical extension orders, he was 

denied medical coverage, resulting in three delays in scheduling a surgery. He also 

told us he received medical bills associated with his wife’s hospitalization for the 

delivery of their premature baby as a result of these gaps in coverage.
Page 10 GAO-04-413T 

part because of confusion over responsibility for starting location-based 

pays, a soldier was required to carry out a dangerous multiday mission to 

fix these pays.

Individual Case Illustration: Difficulty in Starting In-Theatre Pays

A sergeant with the West Virginia National Guard Special Forces unit was stationed in 

Uzbekistan with the rest of his unit, which was experiencing numerous pay problems. 

The sergeant told us that the local finance office in Uzbekistan did not have the systems 

up and ready, nor available personnel who were familiar with DJMS-RC. According to the 

sergeant, the active Army finance personnel were only taking care of the active Army 

soldiers’ pay issues. When pay technicians at the West Virginia USPFO attempted to 

help take care of some of the West Virginia National Guard soldiers’ pay problems, they 

were told by personnel at DFAS-Indianapolis not to get involved because the active Army 

finance offices had primary responsibility for correcting the unit’s pay issues. 

Eventually, the sergeant was ordered to travel to the finance office at Camp Doha, 

Kuwait, to get its assistance in fixing the pay problems. As illustrated in the following 

map. This trip, during which a soldier had to set aside his in-theatre duties to attempt to 

resolve Army Guard pay issues, proved to be not only a major inconvenience to the 

sergeant, but was also life-threatening. At Camp Doha (an established finance office), a 

reserve pay finance unit was sent from the United States to deal with the reserve 

component soldiers’ pay issues. The sergeant left Uzbekistan for the 4-day trip to Kuwait. 

He first flew from Uzbekistan to Oman in a C-130 ambulatory aircraft (carrying wounded 

soldiers). From Oman, he flew to Masirah Island. From Masirah Island he flew to Kuwait 

International Airport, and from the airport he had a 45-minute drive to Camp Doha. The 

total travel time was 16 hours. The sergeant delivered a box of supporting documents 

used to input data into the system. He worked with the finance office personnel at Camp 

Doha to enter the pertinent data on each member of his battalion into DJMS-RC. After 2 

days working at Camp Doha, the sergeant returned to the Kuwait International Airport, 

flew to Camp Snoopy in Qatar, and from there to Oman. On his flight between Oman and 

Uzbekistan, the sergeant’s plane took enemy fire and was forced to return to Oman. No 

injuries were reported. The next day, he left Oman and returned safely to Uzbekistan.
Page 11 GAO-04-413T 

Guidance Outdated We found several instances in which existing DOD and Army regulations 

and guidance in the pay and allowance area were outdated and conflict 

with more current legislation and DOD regulations. Some existing 

guidance reflected pay policies and procedures dating back to Operations 

Desert Shield and Desert Storm in 1991. While we were able to associate 

ARMENIA

GEORGIA

AZERBAIJAN TAJIKISTAN

QATAR

U. A. E.

YEMEN

IRAQ IRAN

OMAN SAUDI ARABIA

RUSSIA

AFGHANISTAN

PAKISTAN

TURKMENISTAN

UZBEKISTAN

Caspian

Sea

Arabian Sea

Indian Ocean

Gulf of Oman

Persian

Gulf

KAZAKHSTAN

Camp

Snoopy

Masirah Island

Kuwait Intl Airport/

Camp Doha

2

3

5

4

6

7

1

1 After collecting supporting documentation

for company pay updates, Sgt.

departs Uzbekistan and flies to Oman. 

2 Sgt. flies to Masirah Island off the coast

of Oman. 

3 Sgt. flies from Masirah Island to Kuwait

International Airport.

4 Sgt. travels 45 minutes to Camp Doha,

Kuwait, arrives with supporting

documentation, and uses Camp Doha

finance office to input name, SSN, rank,

arrival date, and other pertinent information

for each battalion member. Sgt. returns

to Kuwait International Airport. 

6 Sgt. flies from Camp Snoopy to Oman.

8 Sgt. flies from Oman, returning to duty

station in Uzbekistan. 

7 On initial attempt to fly from Oman back to

Uzbekistan, Sgt.'s flight comes under

enemy fire and returns to Oman. 

5 Sgt. flies from Kuwait International Airport

to Camp Snoopy, Qatar.

KUWAIT

8

Source: GAO.
Page 12 GAO-04-413T 

pay problems with only one of these outdated requirements, there is a risk 

that they may also have caused as yet unidentified pay problems. Further, 

having out-of-date requirements in current regulations may contribute to 

confusion and customer service issues. 

Human Capital Issues With respect to human capital, we found weaknesses including (1) 

insufficient resources allocated to pay processing, (2) inadequate training 

related to existing policies and procedures, and (3) poor customer service. 

The lack of sufficient numbers of well-trained, competent military pay 

professionals can undermine the effectiveness of even a world-class 

integrated pay and personnel system. A sufficient number of well-trained 

military pay staff is particularly crucial given the extensive, cumbersome, 

and labor-intensive process requirements that have evolved to support 

active duty pay to Army Guard soldiers. GAO’s Standards for Internal 

Control in the Federal Government state that management should take 

steps to ensure that its organization has the appropriate number of 

employees, and that appropriate human capital practices, including hiring, 

training, and retention, are in place and effectively operating. 

Insufficient Numbers of Military 

Pay Processing Personnel 

Our audit identified a lack of knowledgeable personnel dedicated to 

entering and processing active duty pays and allowances to mobilized 

Army Guard soldiers. As discussed previously, both active Army and Army 

Guard military pay personnel play key roles in this area. Army Guard 

operating procedures provide that the primary responsibility for 

administering mobilized Army Guard soldiers’ pay rests with the 54 

USPFOs. These USPFOs are responsible for processing pay for drilling 

reservists along with the additional surge of processing required for 

initiating active duty pays for mobilized soldiers.

Our audit work identified concerns with USPFO military pay sections 

operating at less than authorized staffing levels and recruiting and 

retention challenges due to the positions being at a lower pay grade level. 

In addition, few of the military pay technicians on board at the six locations 

we audited had received formal training on pay eligibility and pay 

processing requirements for mobilized Army Guard personnel. 

Although the Army and DFAS have established an agreement that in part 

seeks to ensure that resources are available to provide appropriately 

skilled pay personnel at mobilization stations to support surge processing, 

no such contingency staffing plan exists for the USPFOs. As discussed 

previously, pay problems at the case study units were caused in part by 
Page 13 GAO-04-413T 

USPFO military pay sections attempting to process large numbers of pay 

transactions without sufficient numbers of knowledgeable personnel. 

Lacking sufficient numbers of personnel undermines the ability of the 

USPFO pay functions to carry out established control procedures. For 

example, our audits at the six case study units showed that, for the most 

part, proposed pay transactions were not independently reviewed as 

required by DJMS-RC operating procedures before they were submitted for 

processing. USPFO officials told us that because of the limited number of 

available pay technicians, this requirement was often not followed. For 

example, one Chief of Payroll told us that because they were understaffed, 

the current staff worked 12 to 14 hours a day and still had backlogs of pay 

start transactions to be processed. 

Training on Pay Entitlements and 

Processing Requirements Critical 

We identified instances in which the personnel at military pay offices at 

both the USPFOs and the active Army finance offices did not appear to be 

knowledgeable about the various aspects of the extensive pay eligibility or 

payroll processing requirements. There are no DOD or Army requirements 

for military pay personnel to receive training on pay entitlements and 

processing requirements associated with mobilized Army Guard soldiers or 

for monitoring the extent to which personnel have taken either of the 

recently established training courses in the area. Such training is critical 

given that military pay personnel must be knowledgeable with respect to 

the existing extensive and complex pay eligibility and processing 

requirements. We also found that such training is particularly important for 

active Army pay personnel who may lack knowledge in the unique 

procedures and pay transaction entry requirements to pay Army Guard 

soldiers. As a result, we identified numerous instances in which military 

pay technicians at both the USPFOs and active Army finance office 

locations made data coding errors when entering transaction codes into the 

pay systems. Correcting these erroneous transactions required additional 

labor-intensive research and data entry by other more skilled pay 

technicians. 

While the Army Guard began offering training for their military pay 

technicians in fiscal year 2002, we found that there was no overall 

monitoring of training the Army Guard pay personnel had taken and no 

requirement for USPFO pay technicians to attend these training courses. 

At several of the case study locations we audited, we found that Army 

Guard pay technicians relied primarily on on-the-job-training and phone 

calls to the Army Guard Financial Services Center in Indianapolis or to 
Page 14 GAO-04-413T 

other military pay technicians at other locations to determine how to 

process active duty pays.

In addition, unit commanders have significant responsibilities for 

establishing and maintaining the accuracy of soldiers’ pay records. U.S. 

Army Forces Command Regulation 500-3-3, Reserve Component Unit 

Commander’s Handbook (July 15, 1999), requires unit commanders to 

(1) annually review and update pay records for all soldiers under their 

command as part of an annual soldier readiness review and (2) obtain and 

submit supporting documentation needed to start entitled active duty pay 

and allowances based on mobilization orders. However, we saw little 

evidence that commanders for our case study units carried out these 

requirements. We were told that this was primarily because unit 

commanders have many administrative duties and without additional 

training on the importance of these actions, they may not receive sufficient 

priority attention. 

The lack of unit commander training on the importance of these 

requirements may have contributed to pay problems we identified at our 

case study units. For example, at our Virginia case study location, we 

found that when the unit was first mobilized, USPFO pay personnel were 

required to spend considerable time and effort to correct hundreds of 

errors in the unit’s pay records dating back to 1996. Such errors could have 

been identified and corrected during the preceding years’ readiness 

reviews. Further, we observed many cases in which active duty pays were 

not started until more than 30 days after the entitled start date because 

soldiers did not submit the paperwork necessary to start these pays. 

Customer Service Concerns We found indications that many Army Guard soldiers were displeased with 

the customer service they received. None of the DOD, Army, or Army 

Guard policies and procedures we examined addressed the level or quality 

of customer service that mobilized Army Guard soldiers should receive 

concerning questions or problems with their active duty pays. We found 

that not all Army Guard soldiers and their families were informed at the 

beginning of their mobilization of the pays and allowances they should 

receive while on active duty. This information is critical to enable soldiers 

to determine if they were not receiving such pays and therefore require 

customer service. We also found that the documentation provided to Army 

Guard soldiers—primarily in the form of leave and earnings statements—

concerning the pays and allowances they received did not facilitate 

customer service. 
Page 15 GAO-04-413T 

Consistent with the confusion we found among Army Guard and active 

Army finance components concerning responsibility for processing pay 

transactions for mobilized Army Guard soldiers, we found indications that 

the soldiers themselves were similarly confused. Many of the complaints 

we identified concerned confusion over whether mobilized Army Guard 

personnel should be serviced by the USPFO because they were Army 

Guard soldiers or by the active Army because they were mobilized to 

federal service.

Data collected from Army Guard units mobilized to active duty indicated 

that some members of the units had concerns with the pay support 

customer service they received associated with their mobilization—

particularly with respect to pay issues associated with their demobilization. 

Specifically, of the 43 soldiers responding to our question on satisfaction 

with customer support at mobilization, 10 indicated satisfaction, while 15 

reported dissatisfaction.4

 Similarly, of the 45 soldiers responding to our 

question on customer support following demobilization, 5 indicated 

satisfaction while 29 indicated dissatisfaction.5

 Of the soldiers who 

provided written comments about customer service, none provided any 

positive comments about the customer service they received, and several 

had negative comments about the customer service they received, 

including such comments as “non-existent,” “hostile,” or “poor.” A 

company commander for one of our case study units characterized the 

customer service his unit received at initial mobilization as time-consuming 

and frustrating. 

4

 The remaining 18 respondents indicated they were either as satisfied as not or had no basis 

to judge.

5

 The 11 remaining respondents were either as satisfied as not or had no basis to judge.

Individual Case Illustration: Poor Customer Service

One soldier told us that he submitted documentation on three separate occasions to 

support the housing allowance he should have received as of the beginning of his 

October 2001 mobilization. Each time he was told to resubmit the documentation 

because his previously submitted documents were lost. Subsequently, while he was 

deployed, he made additional repeated inquiries as to when he would receive his 

housing allowance pay. He was told that it would be taken care of when he returned 

from his deployment. However, when he returned from his deployment, he was told that 

he should have taken care of this issue while he was deployed and that it was now too 

late to receive this allowance. 
Page 16 GAO-04-413T 

In addition, procedures used to notify soldiers of large payroll-related debts 

did not facilitate customer service. Under current procedures, if a soldier 

is determined to owe the government money while on active duty, he is 

assessed a debt and informed of this assessment with a notation for an 

“Unpaid Debt Balance” in the remarks section of his leave and earnings 

statement. One such assessment showing a $39,489.28 debt is shown in 

figure 1.
Page 17 GAO-04-413T 

Figure 1: Sample Leave and Earnings Statement with Large Debt Balance 

Source: Individual Leave and Earnings Statement.
Page 18 GAO-04-413T 

Systems Problems Several systems issues were significant factors impeding accurate and 

timely payroll payments to mobilized Army Guard soldiers, including 

• the lack of an integrated or effectively interfaced pay system with both 

the personnel and order-writing systems;

• limitations in DJMS-RC processing capabilities; and

• ineffective system edits for large payments and debts.

Our systems findings were consistent with issues raised by DOD in its June 

2002 report6

 to the Congress on its efforts to implement an integrated 

military pay and personnel system. Specifically, DOD’s report 

acknowledged that major deficiencies with the delivery of military 

personnel and pay services were the direct result of the inability of a 

myriad of current systems with multiple, complex interfaces to fully 

support current business process requirements. DOD has a significant 

system enhancement project underway, but it is likely that the department 

will operate with many of its existing system constraints for a number of 

years.

Figure 2 provides an overview of the five systems currently involved in 

processing Army Guard pay and personnel information. 

6

U.S. Department of Defense, Report to Congress: Defense Integrated Military Human 

Resource System (Personnel and Pay), (Washington, D.C. June 2002).
Page 19 GAO-04-413T 

Figure 2: Overview of Army Guard Pay and Personnel Systems

Lack of Integrated Systems The five key DOD systems (see fig. 4) involved in authorizing, entering, 

processing, and paying mobilized Army Guard soldiers were not integrated. 

Lacking either an integrated or effectively interfaced set of personnel and 

pay systems, DOD must rely on manual entry of data from the same source 

documents into multiple systems. This error-prone, labor-intensive manual 

data entry caused various pay problems—particularly late payments. 

In our case studies, we found instances in which mobilization order data 

that were entered into SIDPERS were either not entered into DJMS-RC for 

several months after the personnel action or were entered inconsistently. 

Consequently, these soldiers either received active duty pays they were not 

entitled to receive—some for several months—or did not timely receive 

active duty pays to which they were entitled. 
Page 20 GAO-04-413T 

A soldier with the Mississippi Army National Guard was mobilized in 

January 2002 with his unit and traveled to the mobilization station at Ft. 

Campbell. The unit stayed at Ft. Campbell to perform post security duties 

until June 2002. On June 14, 2002, the E-4 specialist received a “general” 

discharge order from the personnel office at Ft. Campbell for a drug-related 

offense. However, he continued to receive active duty pay, totaling 

approximately $9,400, until September 2002. Although the discharge 

information was promptly entered into the soldier’s personnel records, it 

was not entered into the pay system for almost 4 months. This problem 

was caused by weaknesses in the processes designed to work around the 

lack of integrated pay and personnel systems. Further, the problem was 

not detected because reconciliations of pay and personnel data were not 

performed timely. Specifically, it was not until over 3 months after the 

soldier’s discharge, through its September 2002 end-of-month 

reconciliation, that the Mississippi Army National Guard USPFO identified 

the overpayment and took action on October 2, 2002, to stop the 

individual’s pay. However, collection efforts on the $9,400 overpayment did 

not begin until July 2003, when we pointed out this situation to USPFO 

officials. 

Individual Case Illustration: Overpayment due to Lack of Integrated Pay and 

Personnel Systems

A soldier with the Mississippi Army National Guard was mobilized in January 2002 with 

his unit and traveled to the mobilization station at Fort Campbell. The unit stayed at Fort 

Campbell to perform post security duties until June 2002. On June 14, 2002, the E-4 

specialist received a "general" discharge order from the personnel office at Fort 

Campbell for a drug-related offense. However, he continued to receive active duty pay, 

totaling approximately $9,400, until September 2002. Although the discharge 

information was promptly entered into the soldier's personnel records, it was not entered 

into the pay system for almost 4 months. This problem was caused by weaknesses in 

the processes designed to work around the lack of integrated pay and personnel 

systems. Further, the problem was not detected because reconciliations of pay and 

personnel data were not performed timely. Specifically, it was not until over 3 months 

after the soldier's discharge, through its September 2002 end-of-month reconciliation, 

that the Mississippi Army National Guard USPFO identified the overpayment and took 

action on October 2, 2002, to stop the individual's pay. However, collection efforts on the 

$9,400 overpayment did not begin until July 2003, when we pointed out this situation to 

USPFO officials.
Page 21 GAO-04-413T 

Pay System Has Limited Active 

Duty Pay Processing Capabilities

DOD has acknowledged that DJMS-RC was not designed to process payroll 

payments to mobilized Army Guard soldiers for extended periods of active 

duty. Consequently, it is not surprising that we found a number of 

“workarounds”—procedures intended to compensate for existing DJMSRC processing limitations with respect to Army Guard active duty pays. 

Such manual workarounds are inefficient and create additional laborintensive, error-prone transaction processing. 

Because of limited DJMS-RC processing capabilities, the Army Guard 

USPFO and in-theatre active Army area servicing finance office pay 

technicians are required to manually enter transactions for nonautomated 

pay and allowances every month. DJMS-RC was originally designed to 

process payroll payments to Army Reserve and Army Guard personnel on 

weekend drills, or on short periods of annual active duty (periods of less 

than 30 days in duration) or for training. With Army Guard personnel now 

being paid from DJMS-RC for extended periods of active duty (as long as 2 

years at a time), DFAS officials told us that the COBOL/mainframe-based 

system was now being stretched to the limits of its functionality. In several 

of the case study units we audited, we found a number of instances in 

which soldiers were underpaid their entitled pays that must be entered 

each month manually (such as foreign language proficiency, special duty 

assignment, or hardship duty pays) because pay technicians did not enter 

the monthly manual transaction input required to initiate those pays every 

month.

In addition, we found a significant number of soldiers were overpaid when 

they were demobilized from active duty before the stop date specified in 

their original mobilization orders. This occurred because pay technicians 

did not update the stop date in DJMS-RC necessary to terminate the 

automated active duty pays when soldiers leave active duty early. For 

example, the military finance office in Kuwait, responsible for paying 

Virginia 20th Special Forces soldiers in the fall of 2002, did not stop hostile 

fire and hardship duty pays as required when these soldiers left 

Afghanistan in October 2002. We found that 55 of 64 soldiers eligible for 

hostile fire pay were overpaid for at least 1 month beyond their departure 

from Afghanistan. 

Further, these month-to-month pays and allowances were not separately 

itemized on the soldiers’ leave and earnings statements in a user-friendly 

format. Instead, many of these pays appeared as lump sum payments 

under “other credits.” In many cases these “other credit” pay and 

allowances appeared with little explanation. As a result, we found 
Page 22 GAO-04-413T 

indications that Army Guard soldiers had difficulty using the leave and 

earnings statements to determine if they received all entitled active duty 

pays and allowances. Without such basic customer service, the soldiers 

cannot readily determine whether they received all entitled active duty 

pays and allowances.

As shown in the example leave and earnings statement extract included in 

figure 3, an Army Guard soldier who received a series of corrections to 

special duty assignment pay along with their current special duty 

assignment payment of $110 is likely to have difficulty discerning whether 

he or she received all and only entitled active duty pays and allowances. 
Page 23 GAO-04-413T 

Figure 3: Sample Army Guard Leave and Earnings Statement

Source: Individual Leave and Earnings Statement.
Page 24 GAO-04-413T 

In yet another example, one sergeant, apparently having difficulty 

deciphering his leave and earnings statement, wrote a letter to a fellow 

service member asking, “Are they really fixing pay issues or are they 

putting them off till we return? If they are waiting, then what happens to 

those who (god forbid) don’t make it back?” This sergeant was killed in 

action in Afghanistan on April 15, 2002, before he knew if his pay problems 

were resolved.

System Edits Do Not Prevent 

Large Payments or Debts

While DJMS-RC has several effective edits to prevent certain 

overpayments, it lacks effective edits to reject large proposed net pays over 

$4,000 at midmonth and over $7,000 at end of month before their final 

processing. We found several instances in our case studies where soldiers 

received large lump sum payments, possibly related to previous 

underpayments or other pay errors, with no explanation. Further, the lack 

of preventive controls over large payments poses an increased risk of 

fraudulent payments. 

Similarly, DJMS-RC does not have system edits to prevent large debts from 

being assessed without review and approval prior to being processed and 

does not require the leave and earnings statement to include an explanation 

of pay-related debt assessments. Such was the case for the following Army 

Guard soldier
Page 25 GAO-04-413T 

DOD has a system enhancement project underway for which one of the 

major expected benefits is the improvement of military pay accuracy and 

timeliness. However, the effort to replace over 80 legacy personnel, pay, 

training, and manpower systems (including DJMS-RC) has been underway 

for over 5 years and DOD has encountered challenges fielding the system. 

In the nearer term, the department reported that it expected to field a 

system to replace the current DFAS system used to process pays to 

mobilized Army Guard soldiers by March 2005. However, given that the pay 

system is only one of several non-integrated systems the department 

currently relies on to authorize and pay mobilized Army Guard soldiers, it 

is likely that the department will continue to operate with many of the 

existing system constraints for at least several more years.

Individual Case Illustration: System Edits Do Not Prevent Large Payments and 

Debts 

A sergeant with the Colorado Army National Guard, Special Forces, encountered 

numerous severe pay problems associated with his mobilization to active duty, including 

his deployment to Afghanistan in support of Operation Enduring Freedom. The 

sergeant’s active duty pay and other pay and allowances should have been stopped on 

December 4, 2002, when he was released from active duty. However, because the 

sergeant’s mobilization orders called him to active duty for 730 days and not the 365 

days that he was actually mobilized, and the Army area servicing finance office at the 

demobilization station, Fort Campbell, did not enter the release from active duty date 

into DJMS-RC, the sergeant continued to improperly receive payments, as if he were still 

on active duty, for 2 and a half months after he was released from active duty totaling 

over $8,000. The sergeant was one of 34 soldiers in the company whose pay continued 

after their release from active duty. In an attempt to stop the erroneous payments, in 

February 2003, pay personnel at the Colorado USPFO created a transaction to cancel 

the tour instead of processing an adjustment to amend the stop date consistent with the 

date on the Release from Active Duty Order. When this occurred, DJMS-RC 

automatically processed a reversal of 11 months of the sergeant’s pay and allowances 

that he earned while mobilized from March 1, 2002, through February 4, 2003, which 

created a debt in the amount of $39,699 on the soldier’s pay record; however, the 

reversal should have only been from December 5, 2002, through February 4, 2003. In 

April 2003, at our request, DFAS-Indianapolis personnel intervened in an attempt to 

correct the large debt and to determine the actual amount the sergeant owed. In May 

2003, DFAS-Indianapolis erroneously processed a payment transaction instead of a debt 

correction transaction in DJMS-RC. This created a payment of $20,111, which was 

electronically deposited to the sergeant’s bank account without explanation, while a debt 

of $30,454 still appeared on his Leave and Earnings Statement. About 9 months after 

his demobilization, the sergeant’s unpaid debt balance was reportedly $26,559, but the 

actual amount of his debt had not yet been determined as of September 2003.
Page 26 GAO-04-413T 

Actions to Improve 

Accuracy and Timeliness of 

Army Guard Pay

While it is likely that DOD will be required to rely on existing systems for a 

number of years, a complete and lasting solution to the pay problems we 

identified will only be achieved through a complete reengineering, not only 

of the automated systems, but also of the supporting processes and human 

capital practices in this area. However, our related report (GAO-04-89) 

detailed immediate actions that can be taken in these areas to improve the 

timeliness and accuracy of pay and allowance payments to activated Army 

Guard soldiers. The need for such actions is increasingly imperative in 

light of the current extended deployment of Army Guard soldiers in their 

crucial role in Operation Iraqi Freedom and anticipated additional 

mobilizations in support of this operation. To help ensure that the Army 

Guard can continue to successfully fulfill its vital role in our national 

defense, immediate steps are needed to at least mitigate the most serious 

problems we identified. 

Accordingly, we made the following short-term recommendations to the 

Secretary of Defense to address the issues we identified with respect to the 

existing processes, human capital, and automated systems relied on to pay 

activated Army Guard personnel. 

Process • Establish a unified set of policies and procedures for all Army Guard, 

Army, and DFAS personnel to follow for ensuring active duty pays for 

Army Guard personnel mobilized to active duty.

• Establish performance measures for obtaining supporting 

documentation and processing pay transactions (for example, no more 

than 5 days would seem reasonable).

• Establish who is accountable for stopping active duty pays for soldiers 

who return home earlier than their units.

• Clarify the policies and procedures for how to properly amend active 

duty orders, including medical extensions.

• Require Army Guard commands and unit commanders to carry out 

complete monthly pay and personnel records reconciliations and take 

necessary actions to correct any pay and personnel record mismatches 

found each month.
Page 27 GAO-04-413T 

• Update policies and procedures to reflect current legal and DOD 

administrative requirements with respect to active duty pays and 

allowances and transaction processing requirements for mobilized 

Army Guard soldiers.

Human Capital • Consider expanding the scope of the existing memorandum of 

understanding between DFAS and the Army concerning the provision of 

resources to support surge processing at mobilization and 

demobilization sites to include providing additional resources to 

support surge processing for pay start and stop transaction 

requirements at Army Guard home stations during initial soldier 

readiness programs.

• Determine whether issues concerning resource allocations for the 

military pay operations identified at our case study units exist at all 54 

USPFOs, and if so, take appropriate actions to address these issues.

• Determine whether issues concerning relatively low-graded military pay 

technicians identified at our case study units exist at all 54 USPFOs, and 

if so, take appropriate actions to address these issues.

• Modify existing training policies and procedures to require all USPFO 

and active Army pay and finance personnel responsible for entering pay 

transactions for mobilized Army Guard soldiers to receive appropriate 

training upon assuming such duties.

• Require unit commanders to receive training on the importance of 

adhering to requirements to conduct annual pay support documentation 

reviews and carry out monthly reconciliations.

• Establish an ongoing mechanism to monitor the quality and completion 

of training for both pay and finance personnel and unit commanders.

• Identify and evaluate options for improving customer service provided 

to mobilized Army Guard soldiers by providing improved procedures for 

informing soldiers of their pay and allowance entitlements throughout 

their active duty mobilizations.

• Identify and evaluate options for improving customer service provided 

to mobilized Army Guard soldiers to ensure a single, well-advertised 
Page 28 GAO-04-413T 

source for soldiers and their families to access for customer service for 

any pay problems.

• Review the pay problems we identified at our six case study units to 

identify and resolve any outstanding pay issues for the affected soldiers.

Systems • Evaluate the feasibility of using the personnel-to-pay interface as a 

means to proactively alert pay personnel of actions needed to start 

entitled active duty pays and allowances.

• Evaluate the feasibility of automating some or all of the current manual 

monthly pays, including special duty assignment pay, foreign language 

proficiency pay, hardship duty pay, and HALO pay.

• Evaluate the feasibility of eliminating the use of the “other credits” for 

processing hardship duty (designated areas), HALO pay, and special 

duty assignment pay, and instead establish a separate component of pay 

for each type of pay.

• Evaluate the feasibility of using the JUSTIS warning screen to help 

eliminate inadvertent omissions of required monthly manual pay inputs.

• Evaluate the feasibility of redesigning Leave and Earnings Statements to 

provide soldiers with a clear explanation of all pay and allowances 

received so that they can readily determine if they received all and only 

entitled pays.

• Evaluate the feasibility of establishing an edit check and requiring 

approval before processing any debt assessments above a specified 

dollar amount.

• Evaluate the feasibility of establishing an edit check and requiring 

approval before processing any payments above a specified dollar 

amount.

With regard to a complete and lasting solution to the pay problems we 

identified, our related report included the following long-term 

recommendations

• As part of the effort currently under way to reform DOD’s pay and 

personnel systems—referred to as DIMHRS—incorporate a complete 
Page 29 GAO-04-413T 

understanding of the Army Guard pay problems as documented in this 

report into the requirements development for this system.

• In developing DIMHRS, consider a complete reengineering of the 

processes and controls and ensure that this reengineering effort deals 

not only with the systems aspect of the problems we identified, but also 

with the human capital and process aspects.

Concluding Comments The extensive problems we identified at the case study units vividly 

demonstrate that the controls currently relied on to pay mobilized Army 

Guard personnel are not working and cannot provide reasonable assurance 

that such pays are accurate or timely. The personal toll that these pay 

problems have had on mobilized soldiers and their families cannot be 

readily measured, but at least with two of our case study units there are 

already indications that these pay problems have begun to have an adverse 

effect on reenlistment and retention. It is not surprising that cumbersome 

and complex processes and ineffective human capital strategies, combined 

with the use of a system that was not designed to handle the intricacies of 

active duty pay and allowances, would result in significant pay problems. 

To its credit, DOD concurred with the recommendations included in our 

companion report and outlined some actions already taken, others that are 

underway, and further planned actions with respect to our 

recommendations.

We did not assess the completeness and adequacy of DOD’s actions 

directed at improving controls over pays to mobilized Army Guard soldiers. 

However, pays to mobilized Army Reserve soldiers rely on many of the 

same processes and automated systems used to pay mobilized Army Guard 

soldiers. At your request, we will be reviewing the pay experiences of 

mobilized Army Reserve soldiers, and we will be assessing the 

effectiveness of any relevant DOD actions taken as part of that review. 

Finally, I commend the Chairman and Vice Chairman for holding an 

oversight hearing on this important issue. Your Committee’s continuing 

interest and diligence in overseeing efforts to effectively and efficiently 

support our Army Guard and Reserve forces will be essential in bringing 

about comprehensive and lasting improvements to many decades-old, 

entrenched problems. For example, in addition to our ongoing review of 

the pay experiences of mobilized Army Reserve soldiers, we now have 

related engagements ongoing that you requested concerning
Page 30 GAO-04-413T 

• controls over pays and related medical benefits for mobilized Army 

Guard soldiers who elect to have their active duty tours extended to 

address injuries or illnesses incurred while on active duty,

• controls over travel reimbursements to mobilized Army Guard soldiers,

• utilization of Army Guard forces since September 11, 2001, and

• the impact of deployments on DOD’s ability to carry out homeland 

security missions.

We are committed to continuing to work with you and DOD to identify and 

monitor actions needed to bring about comprehensive and lasting solutions 

to long-standing problems in its business and financial management 

operations. 

Mr. Chairman, this concludes my statement. I would be pleased to answer 

any questions you or other members of the Committee may have at this 

time. 

Contacts and 

Acknowledgments

For further information about this testimony, please contact Gregory D. 

Kutz at (202) 512-9095 or kutzg@gao.gov. Individuals making key 

contributions to this testimony include Paul S. Begnaud, Amy C. Chang, 

Mary Ellen Chervenic, Francine M. DelVecchio, Dennis B. Fauber, Geoffrey 

B. Frank, Jennifer L. Hall, Charles R. Hodge, Julia C. Matta, Jonathan T. 

Meyer, Sheila D. Miller, and John J. Ryan, Patrick S. Tobo. 

(192113)
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
GAO’s Mission The General Accounting Office, the audit, evaluation and investigative arm of 

Congress, exists to support Congress in meeting its constitutional responsibilities 

and to help improve the performance and accountability of the federal government 

for the American people. GAO examines the use of public funds; evaluates federal 

programs and policies; and provides analyses, recommendations, and other 

assistance to help Congress make informed oversight, policy, and funding 

decisions. GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

Obtaining Copies of 

GAO Reports and 

Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older 

products. The Web site features a search engine to help you locate documents 

using key words and phrases. You can print these documents in their entirety, 

including charts and other graphics.

Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site 

daily. The list contains links to the full-text document files. To have GAO e-mail this 

list to you every afternoon, go to www.gao.gov and select “Subscribe to 

e-mail alerts” under the “Order GAO Products” heading.

Order by Mail or Phone The first copy of each printed report is free. Additional copies are $2 each. A check 

or money order should be made out to the Superintendent of Documents. GAO 

also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a single 

address are discounted 25 percent. Orders should be sent to:

U.S. General Accounting Office

441 G Street NW, Room LM

Washington, D.C. 20548

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Public Affairs Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800

U.S. General Accounting Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548